Question

4 pts

John makes $2,800 per month and has an opportunity to invest $150 per month at an APR of 4.5% in a 401K plan through work. He plans to retire in 30 years.



Type in the EXACT formula you would use in excel (no spaces) to find the amount in the account after he has invested for 30 years.



Using excel, what is the answer to the formula from the previous part?



How much money will he deposit into the 401K over the 30 years?



How much total interest will he earn on his 401K over the 30 years?

Answer 1

9514 1404 393

Answer:

• =FV(4.5%/12,30*12,-150,0)
• $113,907.92
• $54,000
• $59,907.92

Explanation:

We have used the formula shown in Go.ogle Sheets to give the results shown. (We presume Excel has a similar function.)

The result is that the future value of the investment is $113,907.92.

The amount deposited is ($150/mo)(12 mo/yr)(30 yr) = $54,000.

The interest earned is the difference: $113,907.92 -54,000 = $59,907.92.